Trade Regulations

Argentina pulls out of Mercosur trade talks

Apr, 27, 2020 Posted by Sylvia Schandert

Week 202019

The Argentine government informed the other Mercosur countries that it will no longer participate in the ongoing negotiations for future trade agreements within the bloc. Despite this, it will maintain the negotiations that are already in place with the European Union and the European Free Trade Association (EFTA).

According to the secretary of Bilateral and Regional Negotiations in the Americas of the Brazilian Foreign Affairs Ministry, ambassador Pedro Miguel Costa e Silva, the statement from Argentina was made during a videoconference meeting amongst Mercosur’s national coordinators last Friday, April 24th.

“The negotiations with the EU and EFTA will be fulfilled because they are already established. In the case of the others – South Korea, Singapore, Canada, Lebanon, and others that were going to start – they will not go ahead,” said the ambassador. “It was not a surprise. Since the government changed, we knew that the policy was going to change ”.  EFTA is made up of Iceland, Liechtenstein, Norway, and Switzerland.

In a statement, Argentina’s Foreign Affairs Ministry justified this by saying that “Argentina has made it clear that international uncertainty and the state of our economy suggest that we stop progress in these negotiations.”  According to a report by Valor Econômico, in addition to no longer participating in future Mercosur negotiations, Argentina has already sent another underlying message to the other members of the bloc, which is that it will not participate, but it will not obstruct any unilateral reduction in the External Tariff. Common (TEC). TEC is applied jointly by Mercosur countries on products imported from other markets. It is what turns the bloc into a customs union, the second stage in the integration process, and more than a mere free trade zone.

It is worth noting, therefore, that an eventual reduction in TEC by Brazil, Uruguay, and Paraguay – without Argentina – threatens to transform the common tariff, already full of exceptions, into a trading bloc for namesake only.  It would be the end of the customs union.

Sources: Reuters and Valor Econômico

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